The government and the Liberal Democratic Party decided Monday to seek an extension of up to 85 days for the current Diet session to accommodate a supplementary budget for fiscal 1999 as well as other legislation to finance industrial competitiveness measures.

The extended session, planned to run through early September, will allow the LDP leadership race to take place in late September as originally scheduled, government officials said.

Chief Cabinet Secretary Hiromu Nonaka said the government hopes to have the extra budget, focusing mainly on job-creation measures, deliberated first in the extended session.

Nonaka said that the decision to seek the extension leaves no room for calls by some LDP members to move the LDP leadership race forward.

Prime Minister Keizo Obuchi is expected to seek re-election to the post, although he has yet to formally declare his candidacy. Other likely candidates are former LDP Secretary General Koichi Kato and Taku Yamasaki, a former head of the LDP Policy Research Council.

According to LDP rules, the election should be held up to 10 days before the party president’s term expires. Obuchi’s term expires Sept. 30.

Nonaka also denied that Obuchi will dissolve the Lower House for a snap general election, saying the prime minister is “not thinking about a dissolution.”

The government will be able to compile a supplementary budget in early July, the officials said.

The government also intends to submit bills to implement steps aimed at reviving corporate competitiveness in early August, after the budget clears the Diet, Nonaka said at a regular news conference.

“If the bills are submitted in early August, and deliberations begin in late August, we must assume (the session) could continue into September,” Nonaka said.

Earlier on Monday the government and the LDP-Liberal Party coalition agreed to substantially extend the 150-day ordinary session, originally scheduled to close Thursday, in a meeting held at the Prime Minister’s Official Residence, according to informed sources.

During a regular meeting of government and top LDP officials, Obuchi expressed his intention to extend the Diet session, saying the government must deal swiftly with urgent matters such as swelling unemployment.

He expressed hopes that the Ministry of International Trade and Industry will work on the drafting of bills to implement steps aimed at reviving Japan’s industrial competitiveness by August.

“I would like the Diet to deliberate them as soon as possible,” Obuchi was quoted as saying.

Ichiro Ozawa, leader of the Liberal Party, expressed support for an extended Diet session, saying “necessary steps should be aggressively implemented,” according to Deputy Chief Cabinet Secretary Muneo Suzuki.

The LDP and the Liberal Party will further discuss the length of the Diet extension, LDP Secretary General Yoshiro Mori said.

During a meeting of Diet affairs chiefs of the two coalition parties, the Liberal Party urged that other bills, such as one that would officially recognizing the Hinomaru as the national flag and “Kimigayo” as the national anthem, be added to the extended session’s agenda, according to a Liberal Party official.

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